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Tips for Avoiding a Legal Battle in Real Estate

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Legal battles are draining, time-consuming, and can hinder the purchase or sale of your home. It’s important for both buyers and sellers to understand potential legal obstacles, in order to best prepare for them.Here are some tips for avoiding a legal battle in real estate. Follow these three essential steps to make sure your transaction is smooth-sailing from beginning to end.

Work with professionals you trust

Considering the high costs and risks involved in real estate sales/purchases, it’s essential to work with professionals to whom you can safely entrust the biggest investment of your lifetime. Interview your real estate broker carefully, and look out for the warning signs of an unreliable agent. An honest professional will never make you feel pressured, and will provide you with all the market research and expertise you’ll need make an informed decision. Furthermore, they’ll be more adept at reviewing the necessary legal documents, such as the seller’s declaration, and raising the red flags if something seems amiss.

Tips for Avoiding a Legal Battle in Real Estate
Tips for Avoiding a Legal Battle in Real Estate

Get an Inspection – and don’t buy without legal warranty!

Unless you’re buying pre-construction or straight from the developer, it’s absolutely crucial for all buyers to schedule an inspection before the notarization. No matter how perfect the home seems to your untrained eye, an inspection will unearth hidden defects which could potentially jeopardize the long term value of your home. Structural defects, water damage, electrical malfunctions, pests and fungus are all issues that could go unnoticed during the visit and may eventually cost you big in maintenance fees.

Sellers could also consider having an inspection before listing their home on the market. Doing so will provide ample time to fix up any issues and increase it’s overall market value. Don’t forget that most buyers will greatly reduce the value of their offer if they discover a hidden defect during their own inspections.

Lastly, never buy a home without legal warranty unless the property is brand new or your own inspection is extremely thorough. Legal warranty protects you from undisclosed issues which go unnoticed even during the inspection.

The warranty of ownership assures the buyer that:

  • the property is free of all rights except those declared by the seller;
  • the seller has discharged the property of all loans, except for those assumed by the buyer;
  • the property is not subject to any encroachment on the part of the seller or a third person; and that
  • the property does not violate any restrictions of public law, except those declared by the seller or those that the buyer should have discovered.

Buying without warranty automatically puts the sale at the buyer’s own risk.

Tips for Avoiding a Legal Battle in Real Estate
Tips for Avoiding a Legal Battle in Real Estate

Prepare and review the right documentation

The first necessary document in a real estate transaction is the Comparative Market Analysis (CMA). This will indicate to a seller how much they should price their home, and will let a buyer know whether they’re overpaying on their offer. A CMA takes into consideration the physical features of the property (the square footage, number of rooms, floor height, etc), as well as market comparables (how much similar listings have sold for in the same building, street or neighbourhood.)

The seller’s declaration is the most important document to carefully draft or review. For a seller, accidentally or intentionally excluding information on a seller’s declaration is likely to lead to legal recourse.

Lastly, it’s important to review offers and counteroffers thoroughly before accepting or negotiating. Offers can contain conditional clauses which will affect the outcome of your sale/purchase. Don’t sign on the dotted line before you understand the exact terms being stipulated.

Thanks for reading our article: Tips for Avoiding a Legal Battle in Real Estate !


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